[Federal Register Volume 82, Number 127 (Wednesday, July 5, 2017)]
[Rules and Regulations]
[Pages 30947-30949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13796]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
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  Federal Register / Vol. 82, No. 127 / Wednesday, July 5, 2017 / Rules 
and Regulations  

[[Page 30947]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Parts 1024 and 1026

[Docket No. CFPB-2014-0033]
RIN 3170-AA74


Amendments to the 2013 Mortgage Rules Under the Real Estate 
Settlement Procedures Act (Regulation X) and the Truth in Lending Act 
(Regulation Z); Correction

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule; Official Interpretation; Correction.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is making 
several corrections to the final rule it issued in August 2016 (2016 
Mortgage Servicing Final Rule) amending certain of the Bureau's 
mortgage servicing rules. First, the Bureau is correcting two 
typographical errors relating to the early intervention requirements. 
Second, the Bureau is making corrections relating to the effective date 
of official commentary relating to servicers' ability to remove certain 
language in periodic statement sample forms as an option when, for 
example, communicating with confirmed successors in interest; sample 
periodic statement forms that servicers may use for certain consumers 
in bankruptcy; and official commentary relating to the bankruptcy 
periodic statement exemptions and modified statements. The corrected 
effective date for the sample periodic statement forms and commentary 
will be April 19, 2018. Third, the Bureau is amending the Bureau's 
authority citation for Regulation Z.

DATES: This correction is effective October 19, 2017. The effective 
date of amendatory instructions 24.d at 81 FR 72390 and 25.d.ii, vii 
through xvi, xix, xx, and xxi through xxiv at 81 FR 72396 is being 
corrected from October 19, 2017, to April 19, 2018.
    Pursuant to this correction, beginning April 19, 2018: proper use 
of the sample forms in appendices H-30(E) and H-30(F) will comply with 
the form and layout requirements of 12 CFR 1026.41(c) and (d); and 
compliance with comment 41(c)-5 of 12 CFR 1026.41(c) and commentary to 
12 CFR 1026.41(e)(5) and (f) is required.

FOR FURTHER INFORMATION CONTACT: Joel L. Singerman, Counsel; or Laura 
A. Johnson, Senior Counsel; Office of Regulations, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    On August 4, 2016, the Bureau issued the 2016 Mortgage Servicing 
Final Rule amending certain of the Bureau's mortgage servicing 
rules.\1\ The amendments cover nine major topics and focus primarily on 
clarifying, revising, or amending provisions regarding force-placed 
insurance notices, policies and procedures, early intervention, and 
loss mitigation requirements under Regulation X's servicing provisions; 
and prompt crediting and periodic statement requirements under 
Regulation Z's servicing provisions. The amendments also address proper 
compliance regarding certain servicing requirements when a person is a 
potential or confirmed successor in interest, is a debtor in 
bankruptcy, or sends a cease communication request under the Fair Debt 
Collection Practices Act. The Bureau makes the following corrections to 
the 2016 Mortgage Servicing Final Rule.
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    \1\ See Amendments to the 2013 Mortgage Rules under the Real 
Estate Settlement Procedures Act (Regulation X) and the Truth in 
Lending Act (Regulation Z), 81 FR 72160 (Oct. 19, 2016).
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A. Regulation X

Model Clause MS-4(D)--Typographical Error
    Model clause MS-4(D) in the 2016 Mortgage Servicing Final Rule 
contains a typographical error. It provides, in part, ``We have a right 
to invoke foreclosure based on the terms of your mortgage contact.'' 
The Bureau intended the sentence to read, ``We have a right to invoke 
foreclosure based on the terms of your mortgage contract.'' The Bureau 
is correcting this typographical error.
Comment 39(d)(2)-1--Typographical Error
    Regulation X comment 39(d)(2)-1 in the 2016 Mortgage Servicing 
Final Rule discuses a servicer's obligations relating to the written 
early intervention notice, generally required under Sec.  1024.39(b), 
when the borrower has provided a notice under section 805(c) of the 
Fair Debt Collection Practices Act and while any borrower on the 
mortgage loan is a debtor in bankruptcy under title 11 of the U.S. 
Bankruptcy Code. The comment refers to an example in comment 
39(c)(1)(ii)-1.ii but should have referenced comment 39(c)(1)(ii)-2.ii. 
The relevant example is set forth in comment 39(c)(1)(ii)-2.ii. The 
Bureau is correcting this typographical error.

B. Regulation Z

Effective Date Stated in the Amendatory Instruction Relating to Comment 
41(c)-5 in Regulation Z
    The Bureau is correcting the amendatory instruction for comment 
41(c)-5 in Regulation Z. Comment 41(c)-5 relates to servicers' ability 
to remove language from sample periodic statement forms that could 
suggest liability under the mortgage loan agreement if such language is 
not applicable, for example, in the case of a confirmed successor in 
interest who is not liable on the mortgage loan obligation.\2\ Although 
the Bureau specified an effective date for this comment of April 19, 
2018, in the DATES section of the 2016 Mortgage Servicing Rule, it did 
not do so in the relevant amendatory instruction. The Bureau corrects 
this error and applies an effective date of April 19, 2018, to comment 
41(c)-5.
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    \2\ 81 FR 72300.
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Effective Date for Sample Periodic Statement Forms and Commentary 
Relating to Bankruptcy Periodic Statements
    The Bureau is correcting the effective date of the (1) sample 
periodic statement forms that servicers may use for consumers in 
bankruptcy to ensure compliance with Regulation Z Sec.  1026.41, and 
(2) commentary to Regulation Z Sec.  1026.41(e) and (f) relating to the 
bankruptcy periodic statement exemption and modified statements. In the 
2016 Mortgage Servicing Final Rule, the Bureau

[[Page 30948]]

finalized rules relating to a servicer's obligation to provide a 
periodic statement to certain consumers in bankruptcy. First, it 
amended Sec.  1026.41(e)(5) and associated commentary generally to 
limit the circumstances in which a servicer is exempt from periodic 
statement requirements with respect to a consumer who is a debtor in 
bankruptcy or has discharged personal liability for a mortgage loan 
through bankruptcy.\3\ Second, it amended Sec.  1026.41(f) and 
associated commentary generally to allow servicers to make various 
clarifications and modifications to the periodic statement requirements 
with respect to consumers in bankruptcy or who have discharged personal 
liability for a mortgage through bankruptcy.\4\ Third, it issued sample 
forms for periodic statements for certain consumers in bankruptcy.\5\
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    \3\ 81 FR 72310-11.
    \4\ 81 FR 72330.
    \5\ 81 FR 72348.
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    The Bureau intended all of these amendments relating to the 
bankruptcy periodic statement exemptions and modified statements to 
take effect on April 19, 2018, 18 months after publication in the 
Federal Register.\6\ Although the Bureau specified an 18-month 
implementation period for the regulatory text of Sec.  1026.41(e)(5) 
and (f), it specified only a 12-month implementation period for the 
commentary to those provisions and the bankruptcy periodic statement 
sample forms in appendices H-30(E) and H-30(F). The Bureau corrects 
this error and applies an effective date of April 19, 2018, to the 
commentary to Sec.  1026.41(e)(5) and (f) and the sample forms in 
appendices H-30(E) and H-30(F).
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    \6\ 81 FR 72349.
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Authority Citation for Regulation Z To Include 12 U.S.C. 3353
    The Bureau is correcting an omission in the authority citation in 
the 2016 Mortgage Servicing Final Rule. The Bureau did not include 12 
U.S.C. 3353 in the authority citation for amendments to Regulation Z. 
The Bureau is correcting the authority citation to part 1026 to include 
the citation to 12 U.S.C. 3353.

II. Regulatory Requirements

    The Bureau finds that there is good cause to publish these 
corrections without seeking public comment.\7\ Public comment is 
unnecessary because the Bureau is correcting inadvertent, technical 
errors about which there is minimal, if any, basis for substantive 
disagreement. Because no notice of proposed rulemaking is required, the 
Regulatory Flexibility Act does not require an initial or final 
regulatory flexibility analysis.\8\ The Bureau has determined that 
these corrections do not impose any new or revise any existing 
recordkeeping, reporting, or disclosure requirements on covered 
entities or members of the public that would be collections of 
information requiring OMB approval under the Paperwork Reduction Act, 
44 U.S.C. 3501, et seq.
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    \7\ See 5 U.S.C. 553(b)(B).
    \8\ 5 U.S.C. 603(a) and 604(a).
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List of Subjects

12 CFR Part 1024

    Condominiums, Consumer protection, Housing, Insurance, Mortgages, 
Mortgagees, Mortgage servicing, Reporting and recordkeeping 
requirements.

12 CFR Part 1026

    Advertising, Appraisal, Appraiser, Banking, Banks, Consumer 
protection, Credit, Credit unions, Mortgages, National banks, Reporting 
and recordkeeping requirements, Savings associations, Truth in lending.

Correction

    For the reasons set forth above, the Bureau makes the following 
corrections to the final rule FR Doc. No. 2016-18901, published on 
October 19, 2016, at 81 FR 72160:

0
1. On page 72376, in the third column, under amendatory instruction 16, 
revise added MS-4(D) to read as follows:

Appendix MS-4 to Part 1024--Model Clauses for the Written Early 
Intervention Notice

* * * * *

MS-4(D)--Written Early Intervention Notice for Servicers Subject to 
FDCPA (Sec.  1024.39(d)(2)(iii))

    This is a legally required notice. We are sending this notice to 
you because you are behind on your mortgage payment. We want to 
notify you of possible ways to avoid losing your home. We have a 
right to invoke foreclosure based on the terms of your mortgage 
contract. Please read this letter carefully.


0
2. On page 72382, in the third column, under amendatory instruction 
17.g.vii, revise added paragraph 1 under added heading Paragraph 
39(d)(2) to read as follows:
    1. Borrowers in bankruptcy. To the extent the Fair Debt Collection 
Practices Act (FDCPA) (15 U.S.C. 1692 et seq.) applies to a servicer's 
communications with a borrower and the borrower has provided a 
notification pursuant to FDCPA section 805(c) notifying the servicer 
that the borrower refuses to pay a debt or that the borrower wishes the 
servicer to cease communications, with regard to that mortgage loan, 
Sec.  1024.39(d)(2) exempts a servicer from providing the written 
notice required by Sec.  1024.39(d) while any borrower on the mortgage 
loan is also a debtor in bankruptcy under title 11 of the United States 
Code. For an example, see comment 39(c)(1)(ii)-2.ii.
0
3. Revise amendatory instruction 18 and its regulatory text appearing 
on page 72388, first column, to read as follows:
    ``18. The authority citation for part 1026 is revised to read as 
follows:

    Authority:  12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353, 
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.''

0
4. Revise amendatory instruction 24.d appearing on page 72390, third 
column, to read as follows:
    ``d. Effective April 19, 2018, adding H-30(E) and H-30(F).''
0
5. Revise amendatory instruction 25.d.ii appearing on page 72396, first 
column, to read as follows:
    ``ii. Effective April 19, 2018, under 41(c) Form of the periodic 
statement, paragraph 5 is added.''
0
6. Revise amendatory instructions 25.d.vii through xvi and 25.d.xix and 
xx, appearing on page 72396, first column, to read as follows:
    ``vii. Effective April 19, 2018, after the entry for 41(d)(8), the 
heading 41(e) Exemptions is added.''
    ``viii. Effective April 19, 2018, the heading for 41(e)(5) is 
revised, and under that heading paragraphs 1 through 3 are revised, and 
paragraph 4 is added.''
    ``ix. Effective April 19, 2018, the heading 41(e)(5)(i) Exemption 
is added, and paragraph 1 under that heading is added.''
    ``x. Effective April 19, 2018, the heading Paragraph 
41(e)(5)(i)(B)(2) is added, and paragraph 1 under that heading is 
added.''
    ``xi. Effective April 19, 2018, the heading Paragraph 
41(e)(5)(i)(B)(4) is added, and paragraph 1 under that heading is 
added.''
    ``xii. Effective April 19, 2018, the heading 41(e)(5)(ii) 
Reaffirmation or consumer request to receive statement or coupon book 
is added, and paragraph 1 under that heading is added.''
    ``xiii. Effective April 19, 2018, the heading 41(e)(5)(iv) Timing 
of compliance following transition is added.''
    ``xiv. Effective April 19, 2018, the heading 41(e)(5)(iv)(A) 
Triggering events

[[Page 30949]]

for transitioning to modified or unmodified statement or coupon book is 
added, and paragraphs 1 and 2 under that heading are added.''
    ``xv. Effective April 19, 2018, the heading 41(e)(5)(iv)(B) 
Transitional single-billing-cycle exemption is added, and paragraph 1 
under that heading is added.''
    ``xvi. Effective April 19, 2018, the heading 41(e)(5)(iv)(C) Timing 
of first modified or unmodified statement or coupon book after 
transition is added, and paragraphs 1 through 3 under that heading are 
added.''
* * * * *
    ``xix. Effective April 19, 2018, the heading 41(f) Modified 
periodic statements and coupon books for certain consumers in 
bankruptcy is added, and paragraphs 1 through 6 under that heading are 
added.''
    ``xx. Effective April 19, 2018, the heading 41(f)(3) Chapter 12 and 
chapter 13 consumers is added, and paragraphs 1 through 3 under that 
heading are added.''
0
7. Revise amendatory instructions 25.d.xxi through xxiv, appearing on 
page 72396, second column, to read as follows:
    ``xxi. Effective April 19, 2018, the heading 41(f)(3)(ii) Amount 
due is added, and paragraph 1 under that heading is added.''
    ``xxii. Effective April 19, 2018, the heading 41(f)(3)(iii) 
Explanation of amount due is added, and paragraph 1 under that heading 
is added.''
    ``xxiii. Effective April 19, 2018, the heading 41(f)(3)(v) Pre-
petition arrearage is added, and paragraph 1 under that heading is 
added.''
    ``xxiv. Effective April 19, 2018, the heading 41(f)(4) Multiple 
obligors is added, and paragraphs 1 and 2 under that heading are 
added.''

    Dated: June 26, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-13796 Filed 7-3-17; 8:45 am]
 BILLING CODE 4810-AM-P